Job costing, law firm. Keating & Partners is a law firm specializing in labour relations and 1. $85 per professional labour: employee-related work. It employs 25 professionals (5 partners and 20 managers) who work hour directly with its clients. The average budgeted total compensation per professional for 2010 is

$104,000. Each professional is budgeted to have 1,600 billable hours to clients in 2010.

Keating is a highly respected firm, and all professionals work for clients to their maximum 1,600 billable hours available. All professional labour costs are included in a single direct cost category and are traced to jobs on a per-hour basis.

All costs of Keating & Partners other than professional labour costs are included in a single indirect cost pool (legal support) and are allocated to jobs using professional labourhours as the allocation base. The budgeted level of indirect costs in 2010 is $2.2 million.

REQUIRED 1. Compute the 2010 budgeted professional labour-hour direct cost rate.

2. Compute the 2010 budgeted indirect cost rate per hour of professional labour.

3. Keating & Partners is considering bidding on two jobs

a. Litigation work for Richardson Inc. that requires 100 budgeted hours of professional labour

b. Labour contract work for Punch Inc. that requires 150 budgeted hours of professional labour Prepare a cost estimate for each job.

LO1